Financial Crises

Go to http://www.macrohistory.net/data/. Download the dataset.

1. Pick a country in the dataset besides Canada, Australia, or the United Kingdom, and list all of the dates for which they had a crisis. (Canada and Australia do not have enough crises, and the United Kingdom is the example in the sample answer key.)

2. Using Stata or Excel, plot real GDP per capita for the five years before and after each crisis in your country. Identify the year of the peak before the crisis. [Do not turn in the answer to this question.]

3. Construct an event study graph like the ones in class. You can solve this in one of two ways. In the first way, you take each crisis's peak, and construct the average change in GDP one-year, two-years, etc. after the crisis, and plot that. In the second way, run the regression we talked about in class. Plot the result.

4. What is the trough of the recession of the average crisis? How long does it take before the country has GDP that exceeds the peak before the crisis?

5. Make a similar event study for the exchange rate with the U.S. dollar. Does the currency of the country you chose appreciate or depreciate?

For the sake of readability, please do not turn in more graphs than just the event studies requested in 3 and 5. Do still turn in written answers to the other questions.